Gujarat wants to double port capacity

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After over two decades, the Gujarat government, which was the first to lay down a port policy in the country in 1995, has decided to revive the policy that would nearly double the existing port (480 million tons) capacity to 1 billion tons by 2020 besides identifying new locations for greenfield ports.

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Gujarat Maritime Board, the regulator for all the non-major ports or ports that are not controlled by Central government in Gujarat, has got a nod from the state government last month to revive the policy with a target to maintain the present share of GMB traffic (32 percent) in the India’s maritime trade which is the maximum by any state in the country.

With about half a dozen port locations out of the 10 identified by GMB in 1995 being stuck for viability or environmental issues and the new shipbuilding policy of the state laid down in 2010 yet to take off, the regulator has begun the process of hiring consultants for identification of new sites.

“Also, Gujarat offers a concession period of 30 years for greenfield ports that can be extended by another 20 years, while other states are offering concession period of 50 to 60 years. This needs to be looked into and revised,” said a senior GMB official on conditions of anonymity while adding it would take at least six months for the government to come out with the policy.

Considering the fact that it has been now close to 20 years, there is an urgent need to review the policy as a lot of developments have taken place nationally as well as globally, he added.

“While Gujarat had the first mover advantage, the overall regulatory and government policy has led to development of port sector in the state. The land availability in Gujarat for port development as compared to states like neighbouring Maharashtra has been a major advantage. Also labour issues in Gujarat are much lesser in comparison. Maharashtra also has hinterland connectivity issues. Also, Gujarat has many large industries in comparison that contribute to port traffic like petrochemicals, chemicals, pharma, steel, cement and textile,” said Ramesh Singhal, chief executive, i-Maritime Consultancy, which tracks the port and shipping sector.

The port development in Gujarat has been driven by some policies of the state government including The Gujarat Infrastructure Act, Framing of the Model Concession Agreement, captive jetty policy, ship breaking rules and regulations and LNG policy.

The policy helped in opening up Gujarat’s ports sector for privatization as well as development of various execution models for attracting investment. During this time, Pipavav was developed as the country’s first private port in India. This was followed by the first chemical terminal and first LNG terminal in Dahej.

Singhal however cautions that one needs to remember that port demand is driven by industries and it is not the other way round. “Many existing ports in Gujarat can triple their current capacities, so while new greenfield ports should come up, there is need for industrialization near existing ones,” according to Singhal.

The port policy in Gujarat announced in 1995 had targeted “handling 100 million tonnes of cargo in Gujarat waters accounting approximately for 25 percent India’s total cargo by 2000 AD.”

In fiscal year 2000-2001, the non-major ports of Gujarat accounted for about 20 percent of the total national throughput.

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